Revenue Memorandum Order (RMO) No. 22-2026

Date of Issuance: August 24, 2026 (BIR Website)

Effectivity: Immediately

“Prescribing the Consolidated and Revised Policies, Guidelines and Procedures for the Bureau of Internal Revenue Audit Program”

RMO No. 22-2026 establishes a consolidated and revised Bureau of Internal Revenue (BIR) Audit Program that standardizes audit policies, procedures, and controls across all investigating offices. The Order strengthens the reforms introduced under RMO No. 1-2026 and related issuances by institutionalizing a risk-based, system-assisted, and technology-driven audit framework designed to improve transparency, efficiency, accountability, and taxpayer compliance.

KEY HIGHLIGHTS

Objectives

The Order aims to:

• Create a single, uniform audit framework for all BIR investigating offices.
• Integrate existing audit policies and modernization reforms.
• Strengthen internal controls and governance over audit activities.
• Promote transparency, professionalism, and accountability.
• Improve voluntary compliance through quality and evidence-based tax audits.

Scope and Coverage

The Order applies to:

• Revenue District Offices (RDOs)
• Office Audit Sections (OAS)
• Large Taxpayers Service (LTS) Audit Divisions
• National and Regional Investigation Divisions
• Special audit teams and technical working groups
• All taxpayers subject to audit, verification, refund claims, tax clearances, ONETT transactions, and risk-based audit selection.

Major Audit Reforms

1. Single-Instance Audit Framework

A taxpayer may generally be subjected to only one Electronic Letter of Authority (eLA) per taxable year, covering all applicable internal revenue taxes. This prevents fragmented or overlapping audits while ensuring continuity through replacement or consolidated eLAs when necessary.

2. Risk-Based and System-Assisted Audit Selection

Audit case selection will primarily be based on:

• Filed tax returns
• Data analytics
• Third-party information
• Risk indicators embedded in BIR systems
• Verifiable compliance data

Taxpayer identities remain anonymized during the selection and assignment process to promote impartiality and reduce opportunities for undue influence.

3. Mandatory and Priority Cases

The Order classifies audit cases into:

Mandatory Cases – refers to transactions or situations where audit or verification is required as a condition precedent to the issuance of tax clearance, the processing of claims for refund or tax credit, or in other cases as may be identified by the CIR as primary target for audit or investigation.

• Fraud indicators (30% or more underdeclaration/overstatement)
• Tax clearance applications
• Certain ONETT transactions
• Tax exemption and incentive reviews
• Refund and tax credit claims
• Third-party information discrepancies
• Exchange of Information findings

Priority Cases – refer to cases covered by eLAs that are electronically selected through the prescribed BIR system based on prescribed risk-based criteria requiring immediate action. Selection is system-assisted and uses data from filed tax returns and other relevant information available in BIR systems. The corresponding selection codes are embedded in the system.

• Significant decreases in sales or VAT payments
• Persistent losses despite substantial sales
• Large increases in assets with reported losses
• Excessive input VAT claims
• Related-party transactions and shared expense arrangements
• Long-unexamined taxpayers and other risk indicators.

Enhanced Audit Controls

The Order introduces stronger safeguards through:

• Mandatory system recording of audit activities
• Real-time case monitoring and status updates
• Standardized documentary requirements
• Electronic case assignment and workload controls
• Comprehensive audit trail documentation
• Performance monitoring of Revenue Officers (ROs) and supervisors.

Audit Timelines

Prescribed timelines include:

Failure to meet these timelines may result in administrative accountability but does not automatically invalidate assessments.

Taxpayer Rights and Due Process

The Order emphasizes:

• Audits can only be conducted through a valid eLA, Tax Verification Notice (TVN), or Mission Order (MO).
• Examination of records may be conducted at either the taxpayer’s premises or the BIR office, subject to taxpayer consent.
• Standardized notices and document requests must be issued before enforcement actions.
• Due process requirements must be observed throughout the audit process.

Audit of Auditors

To reinforce accountability, promote uniformity, and uphold quality standards in tax examinations, all audit investigation reports and assessment issuances may be subject to a Revalida, or “Audit of Auditors”.

The Revalida shall serve as a quality assurance and compliance review mechanism to ensure that audit findings are factually and legally supported, due process requirements are observed, and assessments are free from material error or procedural defect.

Detailed guidelines governing the conduct of Revalida shall be prescribed under a separate revenue issuance.

Administrative Accountability

Revenue Officers, Group Supervisors, and Heads of Investigating Offices may face administrative sanctions (without prejudice to civil or criminal liability, where applicable) for any violation of this Order, including but not limited to:

• Unauthorized audits
• Improper taxpayer selection
• Misclassification of cases
• Failure to update systems
• Delayed submission of reports
• Non-compliance with prescribed procedures and timelines.